Fairplace, the first p2p lending service in Brazil, faces an investigation by the Federal Police (Polícia Federal). Launched in April Fairplace so far facilitated 2.5 million BRL (approx. 1.5 million US$) loans. Apparently the Central Bank requested an investigation as early as August 10th, claiming that Fairplace violates laws that prohibit companies that are not financial institutions to operate in financial markets.
In December then the Federal Public Ministry of St. Paul (Ministério Público Federal) asked the Federal Police to open an investigation. According to press coverage penalties for the possible violations range up to four years imprisonment.
Separate investigations are undertaken by the Brazil Securities Commission (Comissão de Valores Mobiliários (CVM)).
Founder Eldes Matiuzzo says his company does not provide loans but only offers a platform to match lenders and borrowers. He added that the company checked the legal situation before launching.
Nevertheless Fairplace suspended the auction of new loans on the site on Dec. 15th.